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THE WALES CO-OPERATIVE DEVELOPMENT &

TRAINING CENTRE LIMITED

ANNUAL REPORT AND

FINANCIAL STATEMENTS

YEAR ENDED 31 MARCH 2020

THE WALES CO-OPERATIVE DEVELOPMENT & TRAINING CENTRE LIMITED

CONTENTS OF THE FINANCIAL STATEMENTS


Page

Organisation Information 1

Annual Report 2 – 7

Report of the Independent Auditors 8 – 10

Income and Expenditure Account 11

Balance Sheet 12

Notes to the Financial Statements

13 - 24

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0

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1

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1


ORGANISATION INFORMATION


CHIEF EXECUTIVE Derek Walker

SECRETARY Derek Walker

BOARD Jeff Andrews – Treasurer

Lis Burnett Resigned September 2019

John Chown Re-elected September 2019

Richard Hughes Elected September 2019

David Jenkins – Chair

Nigel Keane

Tamsin Stirling Resigned September 2019

Allison Soroko Elected September 2019

Helen Wilkinson Elected September 2019;

Resigned November 2019

Robin Williams Re-elected September 2019

Co-opted Members:

Angharad Dalton Co-opted September 2019

Menna Jones Co-opted March 2020

Ben Pritchard

Kathryn Williams Resigned September 2019

TUC Nominated Member

Julie Cook Replaced September 2019

Nisreen Mansour Appointed September 2019

OTHER OFFICERS Glenn Bowen - Director of Enterprise

Rhian Edwards - Commercial Director; Appointed October 2019

Joanne Jones - Director of Finance and Resources; Appointed

December 2019

Judy Leering - Director of Corporate Services; Resigned

December 2019

Karen Lewis - Director of External Engagement

Lara Ramsay - Director of Inclusive Communities; Appointed

June 2019

REGISTERED OFFICES Y Borth

13 Beddau Way

CAERPHILLY

CF83 2AX

REGISTERED NUMBER 24287 R (Mutuals Public Register – FCA)

AUDITORS Azets Audit Services

Ty Derw, Lime Tree Court

Cardiff Gate Business Park, Cardiff CF23 8AB

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ANNUAL REPORT


The Officers and Board present its report with the financial statements of the Centre for

the year ended 31 March 2020.

STRUCTURE, GOVERNANCE AND MANAGEMENT

The Centre is registered with the Financial Conduct Authority under the Co-operative and

Community Benefit Societies Act 2014 and is governed under the Centre’s rules.

The Board is responsible for the overall governance of the Centre. Board members are

appointed through election by the Centre’s members or by co-option. The Wales TUC

also nominates a member to the board.

Effective partnership between Board members and employees is fundamental to the

success of the Centre. The Centre has a Joint Consultative Group involving union and staff

representatives as well as board members and members of the Senior Leadership Team.

The purpose of the Group is to share information about the development of the Centre’s

activities and to enable the regular sharing of information on matters relating to

employment and well-being at the Centre. The Board recognises the GMB trade union

and negotiates with the union on pay and conditions.

The Board meets on a regular basis. There are a minimum of four operational Board

meetings and four strategic Board meetings per year. In addition, the Board has one sub-

committee, which is the Risk and Audit Committee.

The Board delegates the exercise of certain powers in connection with the management

and administration of the Centre as set out below. This is controlled by requiring regular

reporting back to the Board so that all decisions made under delegated powers can be

ratified by the full Board in due course.

Risk and Audit Committee

The Risk and Audit Committee comprises a minimum of 3 members. The committee meets

quarterly. It takes delegated responsibility on behalf of the Board for ensuring that there

is an appropriate framework of accountability within the organisation, advising the Board

on matters of financial accountability, risk control and governance.

Chief Executive and other Key Management Personnel

The Chief Executive is responsible for the day to day management of the Centre’s affairs

and for implementing policies agreed by the Board. Other key management personnel are

outlined on page 1 as other officers. Their remuneration is in line with the Centre’s pay

scales.

OBJECTIVES AND PRINCIPAL ACTIVITIES

Established over 35 years ago, the Centre is a not-for-profit co-operative organisation that

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ANNUAL REPORT


works with people, communities and enterprises to improve their lives and livelihoods. We

will achieve our purpose through our mission, which is to develop sustainable businesses

and strong inclusive communities by working co-operatively.

We reviewed our strategy in 2019 and have set ourselves the following four strategic goals for the

period 2020 to 2022. We will:

• be champions for a fairer and greener society, for co-operative working and for the use of

technology for social good – leading the public debate, shaping policy and campaigning

for positive change

• help to change the way the economy works, by leading the growth of co-operatives,

mutuals, social enterprises and employee-owned businesses as well as by supporting small

businesses in the foundational economy to thrive

• enable people to improve their lives and livelihoods by helping them to improve their

digital confidence and to make their communities stronger

• be a strong and agile organisation that looks after our people, focuses on making a

positive impact and ensures our values underpin everything we do.

ACHIEVEMENTS AND PERFORMANCE

Throughout 2019-2020 the Wales Co-operative Centre continued to deliver important

initiatives to strengthen the Welsh economy through support to social businesses, funded

by the EU and the Welsh Government. Our Social Business Wales Growth programme

created 172 jobs. Seventy-two of these new jobs went to unemployed people, giving them

a first foot on the employment ladder. From March the SBW team provided expert advice

to help social businesses to survive during the economic problems caused by the

coronavirus pandemic. During the year, we also launched a service to support entrepreneurs

in Wales to set up new social enterprise. This Social Business Wales New Start programme

had already established 26 new social businesses by the end of the year.

The Community Shares Wales project, funded by the National Lottery Community Fund,

came to an end during the year. In the three years of the project, the team delivered advice

and support to over 120 communities with 12 launching their share offer, collectively raising

£2.7 million through shares, levering in £7.4 million and engaging 2,469 investors as well as

156 volunteers. Back in 2016 the community shares market was dominated by the

community energy sector and a handful of community shops and pubs. In 2020 the

landscape of community shares in Wales looks significantly different with schemes

operating in new sectors, using innovative incentives to engage new investors and with

community members championing the model within their networks. We are delighted that

the National Lottery Community Fund has agreed funding for a successor project to

Community Shares Wales, which will launch in October 2020.

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ANNUAL REPORT


The Care to Co-operate project supports people in Wales who wanted to set up or run

well-being services in a more collaborative, co-operative and inclusive way. During the

year the team registered five new co-operative groups or organisation. This Welsh

Government funded project ended in March 2020 and subsequently we have been

successful in gaining funding from Swansea and Bridgend councils to continue to run a

similar service in these areas.

We once again delivered the Social Enterprise Assist (SE Assist) programme in Wales. SE

Assist is a pioneering approach to social investment, which brings together large businesses

and social enterprises, led by the Charities Aid Foundation (CAF) and Legal & General.

We led initiatives to strengthen communities and promote inclusion. Our Welsh

Government funded Digital Communities Wales (DCW) project ended in June 2019. The

project’s aim was to reduce digital exclusion by providing training, support and

encouragement to organisations to help them support digitally excluded people. The

programme achieved its targets and over achieved significantly on two KPIs – people

trained and volunteers placed.

We were successful in bidding for a successor contract. The new DCW programme- Digital

Communities Wales: Digital Confidence, Health and Wellbeing - began on 1st July 2019. It

continues the excellent work to embed digital inclusion within organisations across Wales.

The programme is led by the Wales Co-operative Centre and includes a partnership with

the Good Things Foundation and Swansea University. The new programme has an

additional focus on health and social care, supporting staff and patients to increase digital

skills and improve health outcomes. Our increased support to the health and social care

sectors has been vital in assisting their response to the coronavirus pandemic. We acted

quickly to transform our face-to-face training and client support into delivering virtually.

We developed and adapted resources to help people stay connected whilst in isolation.

We launched a new housing programme during the year - ‘Communities Creating Homes’

- with funding from the Welsh Government and the Nationwide Foundation. This new

programme follows on from the Co-operative Housing Project and will work with

communities and organisations across Wales to grow the number of co-operative and

community led housing schemes in order to deliver more affordable housing for people

in need.

During the year we established a new directorate to strengthen our commercial services.

We added to our range of services with a new initiative called Social Business Connect to

help businesses meet social value requirements when bidding for large public sector

contracts or investment. The service is supporting organisations in the development of

their supply chains in order to trade with the social business sector. Working with Creating

Enterprise, a subsidiary of housing association Cartrefi Conwy, we also set up an innovative

Wales-wide learning and development programme for companies and public bodies

called the Social Enterprise Academy Wales.

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ANNUAL REPORT


Our policy and research work continued to influence decision-makers. We partnered with

the Future Generations Commissioner to launch the ‘Journey to a Prosperous Wales’

resource which provides guidance to public bodies and other organisations about how

they meet the well-being goals in the Well-being of Future Generations Act. We launched

a new report which highlighted the benefits of living in co-operative and community-led

housing. We worked with the social enterprise sector and other support agencies to

develop a ten year vision and action plan for the social enterprise sector in Wales. The

final report will be launched in July 2020. In addition, we provided support to the Senedd’s

Cross Party Group on Co-operatives and Mutuals, which looked at a range of subjects

including a new co-operative bank for Wales.

We maintained a focus on our ongoing programme of continuous improvement. During

the year the Centre was re-assessed for Investors in People accreditation and retained the

Gold standard. We also retained our Green Dragon level 2 accreditation and our Cyber

Essentials accreditation, proving our ongoing commitment to the environment and cyber

security.

In our annual staff survey, staff were asked for their views and ideas for improvement.

93% said they would recommend the Centre as a great place to work and 93% said they

were proud to work here. Our gender profile has a male/female ratio of 37% to 63%

and our pay ratio is a favourable 1:3.9.

IMPACT OF COVID 19

In response to the pandemic, the Centre reacted quickly to protect the health and safety

of our employees and clients. The organisation has been able to operate effectively whilst

employees work from home. Demand for some of our key services has increased, in

particular business support and help with basic digital skills. This has resulted in the Centre

being granted additional funding by Welsh Government to distribute tablet devices to

care homes, hospices and sheltered accommodation in the months following the Year

End.

The large proportion of our funding is from Welsh Government, the EU as well as from

trusts and foundations, such as the Nationwide Foundation. This funding is in place for

the next couple of years and we do not expect that to change. Some of our trading

activities have been affected, making it difficult to make new sales or deliver certain

services during the crisis. This was the major factor in the Centre making a small loss in

2019-20. A very small number of employees were diverted to work in other parts of the

business to reduce our costs during that time and one staff member was furloughed for a

few months. We are not anticipating a long term impact on our commercial business as

much of the work can be delivered remotely.

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ANNUAL REPORT


FINANCIAL REVIEW AND RESULTS

During the year, the Centre generated a turnover of £5.3m from a combination of grants,

contract income and consultancy work. A deficit of £16.9K was generated in the period.

The majority of the Centre’s activities operate on a cost recovery basis.

The main funding sources for the Centre for 2019-2020 comprise:

• grant funding from the Welsh Government to deliver core activities and specific

individual project work;

• a mixture of European grants and Welsh Government grants to support our

enterprise projects;

• grant funding from the Welsh Government and the Nationwide Foundation to

deliver our Co-operative Housing Project;

• grant income from The Big Lottery Fund to fund our Community Shares Wales

project, and

• income received from the Welsh Government in relation to the delivery of the

Digital Communities Wales contract.

A prudent investment strategy is in place to ensure the safeguarding of reserves. Net

assets as at 31 March 2020 were £872.8K comprising a general reserve of £399.7K, share

capital of £136 and designated reserves of £473K. Designated reserves provide resources

to allow for the continuation and development of the Centre and a critical cost reserve in

the event that the Centre has to radically reduce its activities, downsize or close down.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the Board is aware, there is no relevant audit information of which the Centre's

auditors are unaware, and each Board member has taken all the steps that they ought to

have taken as a Board member in order to make themselves aware of any relevant audit

information and to establish that the Centre's auditors are aware of that information.

AUDITORS

The auditors, Azets Audit Services, will be proposed for re-appointment at the

forthcoming Annual General Meeting. This followed a tendering process carried out in

2019.

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ANNUAL REPORT


STATEMENT OF BOARD RESPONSIBILITIES

The Board is responsible for preparing the Annual Report and the financial statements in

accordance with applicable law and regulations.

The Board is required to prepare financial statements for each financial year in accordance

with United Kingdom Generally Accepted Accounting Practice (United Kingdom

Accounting Standards and applicable law). The financial statements are required by law to

give a true and

fair view of the state of affairs of the Centre and of its excess of income over expenditure

for that period. In preparing these financial statements, the Board is required to:

• select suitable accounting policies and then apply them consistently;

• make judgments and estimates that are reasonable and prudent;

• state whether applicable UK Accounting Standards have been followed; and

• prepare the financial statements on the going concern basis unless it is inappropriate

to presume that the Centre will continue in business.

The Board is responsible for maintaining satisfactory systems of internal control and

keeping proper accounting records that disclose with reasonable accuracy at any time the

financial position of the Centre and enable them to ensure that the financial statements

comply with the Co-operative and Community Benefit Societies Act 2014. They are also

responsible for safeguarding the assets of the Centre and hence for taking reasonable

steps for the prevention and detection of fraud and other irregularities.

The Board is responsible for the maintenance and integrity of the corporate and financial

information included on the Centre’s website. Legislation in the United Kingdom

governing the preparation and dissemination of financial statements may differ from

legislation in other jurisdictions.

ON BEHALF OF THE BOARD

..........................................................................

David Jenkins - Chair

Date………...……………………………………….

8

REPORT OF THE INDEPENDENT AUDITORS TO THE SHAREHOLDERS OF


Opinion

We have audited the financial statements of The Wales Co-operative Development & Training

Centre Limited (the “Centre”) for the year ended 31 March 2020 which comprise the Income

and Expenditure Account, the Balance Sheet and notes to the financial statements, including a

summary of significant accounting policies. The financial reporting framework that has been

applied in their preparation is applicable law and United Kingdom Accounting Standards,

including Financial Reporting Standard 102: The Financial Reporting Standard applicable in the

UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

This report is made solely to the Centre's members, as a body, in accordance with Section 87 of

the Co-operative and Community Benefits Societies Act 2014. Our audit work has been

undertaken so that we might state to the Centre's members those matters we are required to

state to them in an auditor's report and for no other purpose. To the fullest extent permitted by

law, we do not accept or assume responsibility to anyone other than the Centre and the Centre's

members as a body, for our audit work, for this report, or for the opinions we have formed.

In our opinion, the financial statements:

• give a true and fair view of the state of the Centre's affairs as at 31 March 2020 and of the

Centre's income and expenditure for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted

Accounting Practice;

• have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK))

and applicable law. Our responsibilities under those standards are further described in the

Auditor's responsibilities for the audit of the financial statements section of our report. We are

independent of the Centre in accordance with the ethical requirements that are relevant to our

audit of the financial statements in the UK, including the FRC's Ethical Standard and we have

fulfilled our other ethical responsibilities in accordance with these requirements. We believe that

the audit evidence we have obtained is sufficient and appropriate to provide a basis for our

opinion.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK)

require us to report to you where:

• the Board members' use of the going concern basis of accounting in the preparation of the

financial statements is not appropriate; or

• the Board members have not disclosed in the financial statements any identified material

uncertainties that may cast significant doubt about the Centre's ability to continue to adopt

the going concern basis of accounting for a period of at least twelve months from the date

when the financial statements are authorised for issue.

9



Other information

The Board members are responsible for the other information. The other information comprises

the information included in the annual report other than the financial statements and our

auditor's report thereon. Our opinion on the financial statements does not cover the other

information and, except to the extent otherwise explicitly stated in our report, we do not express

any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other

information and, in doing so, consider whether the other information is materially inconsistent

with the financial statements or our knowledge obtained in the audit or otherwise appears to

be materially misstated. If we identify such material inconsistencies or apparent material

misstatements, we are required to determine whether there is a material misstatement in the

financial statements or a material misstatement of the other information. If, based on the work

we have performed, we conclude that there is a material misstatement of this other information;

we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Co-operative and Community Benefits

Societies Act 2014

In our opinion, based on the work undertaken in the course of the audit:

• the information given in the annual report for the financial year for which the financial

statements are prepared is consistent with the financial statements; and

• the directors' report has been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the Centre and its environment obtained in

the course of the audit, we have not identified material misstatements in the Annual Report.

We have nothing to report in respect of the following matters in relation to which the Co-

operative and Community Benefits Societies Act 2014 requires us to report to you if, in our

opinion:

• adequate accounting records have not been kept by the Centre or returns adequate for our

audit have not been received from branches not visited by us;

• the Centre’s financial statements are not in agreement with the accounting records and

returns;

• certain disclosures of members' remuneration specified by law are not made; or

• we have not obtained all the information and explanations necessary for the purposes of our

audit.

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Responsibilities of the Board members

As explained more fully in the Board members' responsibilities statement set out on page 7 the

members are responsible for the preparation of the financial statements and for being satisfied

that they give a true and fair view, and for such internal control as they determine is necessary

to enable the preparation of financial statements that are free from material misstatement,

whether due to fraud or error.

In preparing the financial statements, the members are responsible for assessing the Centre's

ability to continue as a going concern, disclosing, as applicable, matters related to going

concern and using the going concern basis of accounting unless the members either intend to

liquidate the Centre or to cease operations, or have no realistic alternative but to do so.

Our responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a

whole are free from material misstatement, whether due to fraud or error, and to issue an

auditor's report that includes our opinion. Reasonable assurance is a high level of assurance,

but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect

a material misstatement when it exists. Misstatements can arise from fraud or error and are

considered material if, individually or in the aggregate, they could reasonably be expected to

influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located

on the Financial Reporting Council's website at: [www.frc.org.uk/auditorsresponsibilities]. This

description forms part of our auditor's report.

Azets Audit Services Date …………………….…………………..

Chartered Accountants & Statutory Auditors

Ty Derw

Lime Tree Court

Cardiff Gate Business Park

Cardiff

CF23 8AB

11


INCOME AND EXPENDITURE ACCOUNT


Notes

2020

£

2019

£

TURNOVER

The Welsh Government 2 2,416,345 1,850,455

European Funding 2 2,339,330 2,079,606

Other Grants and Sources of Income 2 593,976 584,525

5,349,651 4,514,586

Staff costs 3 (3,155,742) (2,599,931)

Travel costs (123,440) (95,513)

Operational Costs (2,087,975) (1,800,079)

(5,367,157) (4,495,523)

OPERATING SURPLUS/(DEFICIT)

4 (17,506)

19,063

Interest receivable and similar income 709 642

(DEFICIT)/SURPLUS ON ORDINARY

ACTIVITIES BEFORE TAXATION

4 (16,797)

19,705

Tax on surplus on ordinary activities 5 (135) (122)

(DEFICIT)/SURPLUS FOR THE YEAR

AFTER TAXATION 15 (16,932) 19,583

CONTINUING OPERATIONS

None of the Centre’s activities were acquired or discontinued during the current period or

previous year.

TOTAL RECOGNISED GAINS AND LOSSES

The Centre has no recognised gains or losses other than the surpluses for the current period

or previous year.

The notes on pages 13 – 24 form part of these financial statements

12


BALANCE SHEET

31 MARCH 2020

2020 2019

Notes £ £ £ £

FIXED ASSETS

Tangible assets 6 26,971 -

Investments 7 250 250

27,221 250

CURRENT ASSETS

Debtors 9 658,070 350,263

Cash at bank and in hand 1,746,672 1,473,508

2,404,742 1,823,771

CREDITORS

Amounts falling due within one year 10 (1,559,151) (934,292)

NET CURRENT ASSETS 845,591 889,479

NET ASSETS 872,812 889,729

CAPITAL AND RESERVES

Designated reserves 14 596,341 615,625

General reserve 14 276,335 273,983

Share capital 12 136 121

SHAREHOLDERS' FUNDS 15 872,812 889,729

The financial statements were approved by the Board ................................ and were signed by:

.................................................................... ..................................................................

D Walker D Jenkins

Chief Executive Chair

……………………………………………………

J Andrews

Treasurer

The notes on pages 13 – 24 form part of these financial statements

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NOTES TO THE FINANCIAL STATEMENTS


1. ACCOUNTING POLICIES

Company Information

The Wales Co-operative Development and Training Centre Ltd is a company limited by

shares incorporated in England and Wales. The registered office is Y Borth, 13 Beddau

Way, Caerphilly, UK, CF83 2AX.

Status

The Centre is registered with the Financial Conduct Authority under the Co-operative

and Community Benefits Societies Act 2014.

Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial

Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the

requirements of the Co-operative and Community Benefits Societies Act 2014.

The financial statements are prepared in sterling, which is the functional currency of the

company. Monetary amounts in these financial statements are rounded to the nearest £

sterling.

Turnover

Turnover represents the total amount receivable by the Centre in the ordinary course of

business for services and grant funding managed by the centre.

Going Concern

At the time of approving the Board have a reasonable expectation that the company has

adequate resources to continue in operational existence for the foreseeable future. The

Board adopt the going concern basis of accounting in preparing the financial statements.

Grants and Contracts

Government grants are recognised at the fair value of the asset received or receivable

when there is reasonable assurance that the grant conditions will be met and the grants

will be received.

A grant that specifies performance conditions is recognised in income when the

performance conditions are met. A grant received before the recognition criteria are

satisfied is recognised as a liability.

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Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or

valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost less their residual values over their

useful lives on the following bases:

Computer Equipment – 33.33% straight line

Office Equipment – 20% straight line

The organisation has a capitalisation policy whereby only assets above £1,500 are

capitalised.

The gain or loss arising on the disposal of an asset is determined as the difference

between the sale proceeds and the carrying value of the asset, and is credited or

charged to profit or loss.

Fixed asset investments are stated at cost less provision for diminution in value.

Impairment of fixed assets

At each reporting end date, the company reviews the carrying amounts of its tangible

and intangible assets to determine whether there is any indication that those assets have

suffered an impairment loss. If any such indication exists, the recoverable amount of the

asset is estimated in order to determine the extent of the impairment loss (if any). Where

it is not possible to estimate the recoverable amount of an individual asset, the company

estimates the recoverable amount of the cash-generating unit to which the asset

belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In

assessing value in use, the estimated future cash flows are discounted to their present

value using a pre-tax discount rate that reflects current market assessments of the time

value of money and the risks specific to the asset for which the estimates of future cash

flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less

than its carrying amount, the carrying amount of the asset (or cash-generating unit) is

reduced to its recoverable amount. An impairment loss is recognised immediately in

profit or loss, unless the relevant asset is carried at a revalued amount, in which case the

impairment loss is treated as a revaluation decrease.

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Recognised impairment losses are reversed if, and only if, the reasons for the impairment

loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying

amount of the asset (or cash-generating unit) is increased to the revised estimate of its

recoverable amount, but so that the increased carrying amount does not exceed the

carrying amount that would have been determined had no impairment loss been

recognised for the asset (or cash-generating unit) prior years. A reversal of an impairment

loss is recognised immediately in profit or loss, unless the relevant asset is carried in at a

revalued amount, in which case the reversal of the impairment loss is treated as a

revaluation increase.

Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks and

credit unions.

Pensions

The Centre operates a defined contribution scheme. The pension costs charged in the

financial statements represent the contributions payable during the year in accordance

with FRS 102.

Investments

Fixed asset investments are stated at cost less provision for diminution in value.

Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial

Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its

financial instruments.

Financial instruments are recognised in the company's statement of financial position

when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial

statements, when there is a legally enforceable right to set off the recognised amounts

and there is an intention to settle on a net basis or to realise the asset and settle the

liability simultaneously.

Basic financial assets

Basic financial assets, which include trade and other receivables and cash and bank

balances, are initially measured at transaction price including transaction costs and are

subsequently carried at amortised cost using the effective interest method unless the

arrangement constitutes a financing transaction, where the transaction is measured at

the present value of the future receipts discounted at a market rate of interest.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed

for indicators of impairment at each reporting end date.

16




Financial assets are impaired where there is objective evidence that, as a result of one or

more events that occurred after the initial recognition of the financial asset, the estimated

future cash flows have been affected. If an asset is impaired, the impairment loss is the

difference between the carrying amount and the present value of the estimated cash

flows discounted at the asset’s original effective interest rate. The impairment loss is

recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the

impairment was recognised, the impairment is reversed. The reversal is such that the

current carrying amount does not exceed what the carrying amount would have been,

had the impairment not previously been recognised. The impairment reversal is

recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from

the asset expire or are settled, or when the company transfers the financial asset and

substantially all the risks and rewards of ownership to another entity, or if some

significant risks and rewards of ownership are retained but control of the asset has

transferred to another party that is able to sell the asset in its entirety to an unrelated

third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of

the contractual arrangements entered into. An equity instrument is any contract that

evidences a residual interest in the assets of the company after deducting all of its

liabilities.

Basic financial liabilities, including trade and other payables, bank loans, loans from fellow

group companies and preference shares that are classified as debt, are initially

recognised at transaction price unless the arrangement constitutes a financing

transaction, where the debt instrument is measured at the present value of the future

receipts discounted at a market rate of interest.

Trade creditors are obligations to pay for goods or services that have been acquired in

the ordinary course of business from suppliers. Accounts payable are classified as current

liabilities if payment is due within one year or less. If not, they are presented as non-

current liabilities. Trade creditors are recognised initially at transaction price and

subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire

or are discharged or cancelled.

Taxation

The tax expense represents the sum of the tax currently payable.

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Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs

from net profit as reported in the profit and loss account because it excludes items of

income or expense that are taxable or deductible in other years and it further excludes

items that are never taxable or deductible. The company’s liability for current tax is

calculated using tax rates that have been enacted or substantively enacted by the

reporting end date.

Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense.

The cost of any unused holiday entitlement is recognised in the period in which the

employee’s services are received. For this period only, included within wage costs are

accrued holiday entitlements of £30.3K (2019: £20.1K).

Termination benefits are recognised immediately as an expense when the company is

demonstrably committed to terminate the employment of an employee or to provide

termination benefits.

Payments to defined contribution retirement benefit schemes are charged as an expense

as they fall due.

Leasing commitments

Rentals paid under operating leases are charged to the income and expenditure account

on a straight line basis over the period of the lease.

Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the Board are required to make

judgements, estimates and assumptions about the carrying amount of assets and

liabilities that are not readily apparent from other sources. The estimates and associated

assumptions are based on historical experience and other factors that are considered to

be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions

to accounting estimates are recognised in the period in which the estimate is revised

where the revision affects only that period, or in the period of the revision and future

periods where the revision affects both current and future periods.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material

adjustment to the carrying amount of assets and liabilities are as follows.

• Useful lives and depreciable assets

Management reviews the useful lives of depreciable assets at each reporting date based

on the expected utilitisation of the assets of the company. The carrying amounts are

analysed in note 6. Actual results, however, may vary due to technical obsolescence.

18




Reserves

The Wales Co-operative Centre has reviewed its financial position and the need to

maintain adequate reserves, ensuring sustainability and development of the Centre.

This is to ensure financial security, appropriate levels of staffing and adequate resources

to meet challenges imposed by changes in funding activities.

The Board considers it prudent that general reserves need to be sufficient:

• to avoid the necessity of realising fixed assets held for the Centre’s use

• cover transfers to the various designated reserves as detailed below

Investment and New Business Reserve:

This reserve has been established to designate funds for investment in future

opportunties or new business activities.

Critical Cost Reserve:

This reserve has been established to cover closure costs arising as a result of project

income ending. Such costs could include redundancy costs. This reserve is to be kept at

an appropriate level, calculated on an annual basis and transfer of funds will be made to

and from the reserve to achieve this.

IT replacement Reserve:

This reserve has been established to cover the costs of replacing IT equipment on a

cyclical basis or as and when the need arises.

19




2. TURNOVER

The turnover and surplus before taxation are attributable to the principal activity of the

Centre.

The turnover for the year is analysed as follows:

2020

2019

£ £

Grant income received:

-The Welsh Government 986,636 1,026,423

-European Funding 2,339,330 2,079,606

Contract Income:

- The Welsh Government

1,429,709 824,032

Other grant & contract income 593,976 584,525

5,349,651 4,514,586

Turnover analysed by geographical market

2020 2019

£ £

United Kingdom 5,349,651

4,514,586

3. STAFF COSTS

2020

2019

£ £

Wages and salaries 2,656,620 2,175,672

Social security costs 281,297 243,592

Staff pension costs 177,290 150,189

Training & development resources 18,826 27,846

Recruitment 21,709 2,632

3,155,742 2,599,931

The average monthly number of employees during the year was as follows:

2020 2019

83 70

No remuneration is paid to board members.

20




3. STAFF COSTS continued

Remuneration of key management personnel

The remuneration of key management personnel, which is the senior management team, is

as follows:

2020 2019

£ £

Aggregate compensation 333,363 222,970

The senior management team in 2020 comprised 6 employees (2019: 4).

4. OPERATING SURPLUS

The operating (deficit)/surplus is stated after charging:

2020

£

2019

£

Depreciation - owned assets 13,486 16,776

Auditors' remuneration

- for audit of the Centre

3,850

3,850

- for reports on grants received by the Centre 1,300 1,325

- - other services 2,950 450

Operating lease rentals 76,465 78,758

Pension costs 177,290 150,189

5. TAXATION

Analysis of the tax charge

The tax charge on the surplus on ordinary activities for the year was as follows:

2020

£

2019

£

Current tax:

UK Corporation tax 135 122

Tax on surplus on ordinary activities 135 122

21




5. TAXATION continued

The charge for the year can be reconciled to the surplus per the income and expenditure

account as follows:

2020

£

2019

£

Surplus/(deficit) before taxation (16,932) 19,705

Expected tax charge based on the standard rate of corporation tax in

The UK of 19.00% (2019: 19.00%) 135 3,744

Surplus/(deficit) not subject to tax - (3,622)

Tax on surplus on ordinary activities 135 122

Except for corporation tax on gross bank interest received, no taxation is payable as HM

Revenue & Customs consider the Centre to be a “not for profit” organisation.

6. TANGIBLE FIXED ASSETS

Computer

& office

equipment

£

COST

At 1 April 2019 272,572

Additions 40,457

At 31 March 2020 313,029

DEPRECIATION

At 1 April 2019 272,572

Charge for year 13,486

At 31 March 2020 286,058

NET BOOK VALUE

At 31 March 2020 26,971

At 31 March 2019 -

22




7. FIXED ASSET INVESTMENTS

Unlisted

Investments

£

COST

At 1 April 2019 & 31 March 2020 250

NET BOOK VALUE

At 1 April 2019 250

At 31 March 2020 250

The fixed asset investment represents 250 £1 shares in ICOF Community Capital.

8. FINANCIAL INSTRUMENTS

2020

2019

£ £

Carrying amount of financial assets

Debt instruments measured at amortised cost 1,821,879 1,565,486

Equity instruments measured at cost less impairment 250 250

Carrying amount of financial liabilities

Measured at amortised costs 433,251 224,822

9. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2020 2019

£ £

Trade debtors 75,207 91,979

Prepayments and accrued income 582,863 258,284

658,070 350,263

23




10. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2020 2019

£ £

Trade creditors 237,958 127,093

Social security and other taxes 67,213 44,796

Accruals 195,293 97,729

Deferred income 1,058,687 664,674

1,559,151 934,292

Restricted funding was received in the previous year from The Big Lottery Fund in relation to

the Community Shares Wales and the Agile Mentoring projects. At the year-end a balance of

£Nil (2019: £31,014) was remaining from the funding which had been deferred to the next

financial year.

The Centre also received restricted grant funding from The Nationwide Foundation in relation

to the Co-operative Housing project. At the year-end a balance of £8,336 (2019: £58,901) was

remaining from the funding which has been deferred to the next financial year.

11. OPERATING LEASE COMMITMENTS

The following operating lease payments are committed to be paid within one year:

2020 2019

£ £

Expiring:

Within one year 9,874 6,972

Between one and five years 58,916 125,296

68,790 132,268

12. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number: Class: Nominal 2020 2019

value: £ £

136 Ordinary £1 136 121

13. RELATED PARTY TRANSACTIONS

The board of directors did not receive remuneration during the current or previous year.

No guarantees have been given or received.

During the previous year the organisation purchased services from Wales Restorative Approaches

Partnership CIC (WRAP) totalling £2,800 with a balance of nil outstanding at the year end. WRAP’s

Chief Executive Officer was a co-opted and then elected Board member of The Wales Co-operative

Development & Training Centre during the year and resigned as Board member in January 2019.

24




14. RESERVES

At

1 April

2019

Movement

in period

At

31 March

2020

£ £ £

Designated reserves

Match funding reserve 96,124 (96,124) -

Critical cost reserve 434,501 (103,160) 331,341

Income generation reserve 20,000 (20,000) -

Investment and New Business reserve - 200,000 200,000

IT replacement reserve 65,000 - 65,000

Designated reserve total 615,625 (19,284) 596,341

General reserve 273,983 2,352 276,335

Total reserves 889,608 (16,932) 872,676

The match funding reserve and Income generation reserve have been merged to form an

Investment and New Business reserve.

15. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS

2020 2019

£ £

(Deficit)/Surplus for the financial year (16,932) 19,583

Movement on share capital 15 21

Net addition to shareholders’ funds (16,917) 19,604

Opening shareholders' funds 889,729 870,125

Closing shareholder’s funds 872,812 889,729

25


INCOME & EXPENDITURE ACCOUNT BY CATEGORY


This schedule does not form part of the financial statements.

Enterprise

Programme

Communities

Commercial

Central

Activity

2020

Total

£ £ £ £ £

Turnover

The Welsh Government 655,507 1,559,814 8,000 193,023 2,416,344

European Funding 2,339,330 - - - 2,339,330

Other Funding 98,019 236,270 110,826 148,862 593,977

Total Income 3,092,856 1,796,084 118,826 341,885 5,349,651

Deposit Account Interest - - - 709 709

Expenditure

Staff costs (1,829,210) (1,068,164) (113,263) (145,106) (3,155,743)

Overheads (272,018) (221,059) (18,771) 274,886 (236,962)

ICT (63,529) (39,914) (5,663) (140,221) (249,327)

Travel & subs (57,773) (51,432) (5,662) (8,573) (123,440)

Marketing (174,210) (66,258) (10,658) (29,713) (280,839)

Professional advice (61,758) (40,383) (2,251) (254,665) (359,057)

Irrecoverable VAT (127,605) (13,714) (556) (2,720) (144,595)

Project support (508,412) (295,160) (1,464) (12,158) (817,194)

Total Expenditure (3,094,515) (1,796,084) (158,288) (318,270) (5,367,157)

Net (Deficit)/Surplus (1,659) - (39,462) 24,324 (16,797)

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